The enterprise software market is notorious for its fierce competition. Titans in the space like Larry Ellison or Marc Benioff have built empires by taking no prisoners and destroying their competitors. That highly competitive culture has even been reflected in the way customers interact with enterprise software vendors. While the consumer market is accustomed to see incumbents raise from nowhere and constantly challenge the established vendors, the enterprise software landscape remains a territory governed by a handful of the “old boys” Microsoft, SAP, IBM, Oracle that are accustomed to fire everything they got when comes to compete for new customers.
If you are entering in the enterprise software space, it can be intimidating to know that your little startup can find itself competing with some of these big companies. However, this situation is not as terrifying as it seems. Quite the contrary, after thinking about this topic for quite some time, I am convinced that competing against the IBMs or SAPs or the world is one of the best thing that can ever happen to an enterprise software startup. You see it all the time with companies like Huddle or Box going directly after Microsoft or companies like Zendesk challenging established vendors such as BMC. As a matter of fact, if you have the opportunity, I would encourage you to pick up a fight with one of those big enterprises software companies as soon as you are ready.
Let me try to explain…
If you have a solid enterprise software product or service, going directly after the big enterprise software players can bring a number of tangible benefits to your startup. Let’s list some of the most notable ones:
Make the Big Old Boy the Villain in Your Story
Every good story needs a villain. If your enterprise software product has a strong value proposition in key areas such as simplicity, scalability, usability, prices etc; You can accentuate those benefits by directly comparing it against the alternative products provided by the big enterprise software vendors.
The Big Old Boys Have the Customers
Another great benefit of picking up a fight with an Oracle or Microsoft is that you can directly target their customer base. In that sense, you have the opportunity of catching the attention of a substantial number of potential customers that are specifically looking for solutions in the space of your enterprise software product.
The Big Old Boys are Slow
Enterprise software, like no other technology area, clearly reflects the inability of the big vendors to quickly innovate and embrace new technology trends. As an enterprise software startup, you can take advantage of that limitation by taking the fight onto areas on which your bigger competitors would have a hard time responding.
The Big Old Boys Can Become Your Friend and Even Acquire You
If your enterprise software product presents a clear value proposition, bigger enterprise software vendors would be open to establish strategic alliances that can be incredibly beneficial. Microsoft’s acquisition of Yammer last week, was a result of a long term partnership between the two organizations that brought Yammer’s social networking capabilities into products like Microsoft SharePoint Server.
If you live in the enterprise software world, you should seriously consider establishing direct competition with the biggest players in the space. While competing with the big enterprise software vendors can be demanding, it can bring clear benefits to your enterprise software startups.
At the end, what is the pleasure of playing if you can’t beat the best? 😉